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Financial Freedom Is Not A Myth

Financial Freedom

Saving For A Rainy Day

In an economy at present, many of us struggle with the ability to save for a rainy day, but I am here to tell you that it can be done! You may ask, but “how can you save for a rainy day in such tough times?” My answer to that question is this, have you ever thought about how much buying a cup of coffee 2 to 3 times per week can add up? A medium cup of coffee from one of the top leading brands can cost anywhere from $2 to $3 plus per cup.

financial_freedomCan you imagine if you were saving those $2 and $3 per cup of coffee, per week? That’s $6 to $9 per week spent on coffee. Add all of those unnecessary spending up, and you’re looking at $24 to $36 per month if you were spending at one of those top leading brands. Not to mention if you bought anything else. These cost adds up and could be applied to cover other important expenditures i.e. credit card debts, student loans, mortgages etc., which brings me to the next topic; Paying-off debts.

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Know About Merchant Banking

banking-300x300Businesses can’t grow without the required capital. But getting access to capital can be a very real pain. It is to fulfill this need of gaining enough capital, that merchant banks were first established. Though they were primary only formed to help out merchants, it is no longer so. Throughout centuries, the services of merchant banks have grown to include a great many industries. The core of the banking though remains the same – they help with businesses with their banking needs. But now they have also included consultancy services. Businesses that feel the need to have advice on marketing, finance, management and legal matters could easily approach merchant banks for assistance. These banks have advisors that now help business with a variety of problems that any business would at one time or another face. They provide their guidance for a set fee.

Their guidance includes a variety of things. When a business is just starting up, they help to seed it with enough capital for it to be sustainable. When the business is about to expand, the bank ensures they raise enough capital for the expansion to be a successful venture. If the business needs to be modernized, they offer suggestions on how and in which manner it can be done, and the financial repercussions that would follow it. If a business needs to be restructured, the banks provide sound advice. When a long-held business has grown sick, they step in to revive it to profit by way of long-term loans. In an overall manner, the banks can also help businesses to buy and sell stock in the stock market. Usually the bank determines the stocks to be released and the time at which they’re to be released. Regardless of which problem businesses have, it had enough experience to guide them. Most of the time though, they tend to pick out larger businesses. But they also help out businesses that are only just starting out.

At times, due to their range of services, these services are also called wholesale banks. Generally, most merchant banks have an area of speciality, things like underwriting and international finance. You’ll find that such banks also have both retail and merchant divisions, in an effort to branch out. Retail banking, being so dissimilar to merchant banking, is usually held as a separate division though. Merchant banks are usually the premise of businesses and large corporates, what with their area of expertise being business and financial management.

Investment Management: Don’t Try This At Home

invWhen I was young — about the time that man discovered fire — it was considered something of a rite of passage to work on your own car. Father and son would pop the hood and pull spark plugs, change the oil, and do other ‘manly’ work on the automobile. My first car happened to be a 1968 Chevy Biscayne. When you opened the hood, there wasn’t a whole lot to see. You could find the plugs, the dip stick, and the windshield washer fluid without any trouble at all.

Things are different now, and people don’t perform the regular maintenance on their cars anymore. Why? Because in order to do it properly, you would need at least two different computers in your garage. Today’s fathers and sons have found other activities to bond over, like playing video games. For most of us, doing our own car maintenance is just a poor use of our time, and taking the car to the dealership, or another automotive expert, is a good value for our money. You can still do it on your own, of course, but it no longer makes sense.

I meet individual investors every day who ‘work’ on their own portfolios. As do-it-yourself investors, they try to make sense of the nuances of the global economy in their limited free time (usually after work, after dinner, and after watching “Hawaii 5-0″ reruns on television). They often ask for my opinion about how they should invest natural disasters in Japan, radioactive clouds over Tokyo, Arab springs and falls, U.S. debt downgrades, political gridlocks, quantitative easings, and the implosion of the European Union, and get most of their investment news from Jim Cramer on CNBC. My advice to them is always the same: Don’t try to do this at home anymore. Times have changed. The world and the financial markets have become too complicated. Hire someone to manage your money for you, but don’t mess around with your own portfolio on a part-time basis unless you’re prepared to lose it. You can still manage money on your own but, like working on your own car, it just isn’t worth it anymore. Find something else pleasant to do with your time. Play with the kids, take your wife out on a date, play some golf, anything at all. If you find the right advisor for you, you’ll discover that the money you pay for that advice is well spent and a good value.

I know this isn’t what do-it-yourselfers want to hear, but it’s the best advice I can offer. Trying to safely navigate today’s financial markets is tough enough for full-time professionals. You might get lucky and make a few good calls, but if you have enough capital for it to matter, don’t take the chance.